Star 2023-06-28

NASPERS and Prosus’ plans to unravel its complex cross-holding structure while applauded by commentators and analysts yesterday, also drew some sharp criticism, because of the length of time management took to do so. Vestact Asset Management portfolio manager Michael Treherne said the removal of the cross-holding should have been done when Prosus was initially spun-off into a listing in 2019 (Naspers management were told so at the time by analysts and shareholders). He said the aim of the unwinding now was for Naspers to be able to continue to buy back shares. He said according to recent esti- mations Naspers’ discount to net asset value (NAV) stood at 52% and Prosus’ discount at 43%, and while the buybacks initially narrowed the discount somewhat, these had subsequently continued to widen.…

NASPERS, the global internet giant, and its Netherland subsidiary Prosus’s share prices surged yesterday after they said a cross holding structure between them would be removed, and in spite of Naspers reporting a widening loss for the year to March 31. Naspers, which also owns Takealot.com and Media 24 in South Africa, yesterday reported a 48% decline in core headline earnings to $1.1 billion (R20.52bn), primarily due to lower contributions from the group’s associates ($1.3bn), of which $1.1bn related to Tencent. Naspers’ biggest investment, the China-based internet giant Tencent was hit by Covid-19 lockdowns and geopolitical and macroeconomic uncertainty. Naspers and Prosus’ e-commerce businesses also widened their losses. Naspers’ share price had surged 8.77% to close at R3 261.28 and the Prosus share price had gained 5.66%…

StatsSA data reveals employment in non-agricultural sector down by 21 000 EMPLOYMENT in the formal non- agricultural sectors of South Africa’s economy continued struggling to recover and could remain depressed as load shedding ramps up the costs of doing business. Data from Statistics South Africa (StatsSA) yesterday showed that total employment in the formal non-agricultural sector went down by 21 000 in the first quarter of 2023, bringing total employment to 9.97 million. The Quarterly Employment Survey showed that 5 out of 8 industries have not returned to pre-pandemic employment levels. Full-time employment fell by 63 000 or 0.7% quarter-on-quarter, from 8 881 000 in December 2022 to 8 818 000 in March 2023. However, part-time employment increased by 42 000 or…

THE SOUTH African government has taken another step in the future energy security direction with a commitment to co-operate with Germany on green hydrogen projects. Minister in the Presidency responsible for Electricity, Dr Kgosientsho Ramokgopa, and German Vice-Chancellor and Minister of Economic Affairs and Climate Action, Robert Habeck, yesterday signed a joint declaration of intent to establish the South African German Hydrogen Task Force. The signing took place virtually during a bi-national commission between South Africa and Germany. Green hydrogen, which is made by splitting water using renewable energy, is one of three ways South Africa is aiming to shift its economy away from a reliance on coal for its electricity generation. The Joint Declaration of Intent is not legally binding nor does it have financial implications for South Africa,…

THE PRUDENTIAL Authority (PA) has been monitoring the levels of exposures by the banks to South Africa’s sovereign debt, following a notable increase in the banking industry’s overall exposure and concentration to government securities in the period since 2020. CEO of the Prudential Authority Nomfundo Tshazibana said in the PA’s latest annual report that: “The PA continues to encourage banks to actively manage, monitor and report such exposures to their appropriate internal governance structures to ensure that exposures remain within approved internal risk appetite metrices.” She said that while government securities were frequently utilised in banks’ risk mitigation strategies, exposures to these securities also needed to be appropriately balanced against credit extension to the real economy. Meanwhile PA chairperson Lesetja Kganyago said two non-systemic banks were placed under curatorship…

THE SOUTH African Reserve Bank (SARB) has justified its decision of implementing a restrictive monetary policy on trying to protect consumers against extremely high cost of living in the near future. The SARB yesterday published its 2022/23 Annual Report for the year ended March 31, 2023, offering a transparent account of the bank’s strategy, performance, and impact on society, focusing on both financial and non-financial information. The SARB’s Monetary Policy Committee (MPC) has raised its benchmark repo rate from a historic low of 3.5% in November 2021 to the current historic 14-year high of 8.25% in its May meeting. The MPC has been on an aggressive hiking cycle to fight off rising inflation, which breached the upper limit of the target range in May 2022 and peaked in July, reaching…